Cinven revealed as £600m bidder for JJB Sports

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The Independent Online

Cinven, the private equity group, emerged yesterday as the company behind a £600m bid last week for JJB Sports, a move which could trigger a protracted auction for Britain's biggest distributor of replica football club shirts.

Cinven, the private equity group, emerged yesterday as the company behind a £600m bid last week for JJB Sports, a move which could trigger a protracted auction for Britain's biggest distributor of replica football club shirts.

On Friday, JJB shares jumped by a quarter to 242p, valuing the group at £558m. The company was forced to tell the Stock Exchange that it had received an approach which "may or may not lead to an offer for the company", without identifying the suitor. However, despite refusals to comment by advisers to both sides, it became clear yesterday that Cinven had made the approach and is contemplating an offer in the region of £600m. Contact between the two parties had initially been made a few weeks ago, but it was only last week that JJB felt obliged to inform the market.

JJB was founded by Dave Whelan, a former footballer with Blackburn Rovers who nowadays likes to be called Mr Wigan. He owns Wigan Athletic football club and Wigan Warriors rugby league club.

The £600m figure is still a rough estimate, as Cinven has not yet had access to JJB's books. Unless Cinven pays a premium for exclusive access, other potential bidders will want to see JJB's internal figures and contest Cinven's assault with bids of their own. Apax, CVC, Permira and PPM Ventures are all understood to be watching the situation.

This is not the first attempt to wrest control of JJB, which has 448 stores. Mr Whelan tried to take it private last year with an offer of £517m in the face of increased competition from discount retailers and supermarkets. That bid did not receive enough support from other shareholders.

In July this year, the company said that profits would be down by about a fifth from last year's £88m. Poor weather and tougher competition were blamed, taking like-for-like turnover down 2 per cent in the 29 weeks to mid-August. JJB shares have lagged others in the general retail sector this year.

On Friday, the Competition Appeal Tribunal upheld an £8.4m fine handed to JJB by the Office of Fair Trading for colluding with Allsports, a rival retailer, to fix the price of replica shirts.

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